Pipfruit growers see risks in sale

By PHILIPPA STEVENSON

HortResearch's bid to sell its 30-year-old pipfruit breeding programme has apple and pear growers worried for the future of their $500 million export industry.

Industry insiders estimate at least $20 million has been spent in the past 20 years on the world-leading programme.

The crown research institute marketed the programme overseas late last year but got no takers, said HortResearch group general manager Dr Michael Lay-Yee.

HortResearch, which inherited the taxpayer and grower-funded programme from the Department of Scientific and Industrial Research, has since had discussions with grower representative group Pipfruit Growers New Zealand and its global partner Associated International Group of Nurseries (AIGN).

Lay-Yee declined to reveal the programme's asking price, citing commercial sensitivity, or to comment on the nature of discussions with Pipfruit Growers and AIGN.

Industry members are concerned that growers will be asked to pay again for a programme that their money helped to build, and which a Ministry of Agriculture and Forestry report says is integral to the industry's future.

Pipfruit Growers chairman Phil Alison would say little about the discussions with HortResearch but said the issue raised questions about crown research institutes' profit motive.

The industry owed its existence to the breeding programme, which had kept New Zealand ahead of competitors by introducing a stream of new apples to the market, he said. It was the pipfruit sector's "knowledge wave technology".

Pipfruit Growers executive officer Paul Browne said hundreds of apple and pear seedlings in the breeding programme could potentially have commercial value.

Discussions with HortResearch centred on the rights to commercialise plants and any future developments from the programme. "The breeding programme has the potential to provide the future for the industry," he said.

One estimate suggests that in the past 20 years taxpayers, through the Government's Foundation for Research Science and Technology, have funded half the programme and growers have funded the other half in royalties on trees and investment from their marketer, the Apple and Pear Marketing Board, later Enza. Since deregulation last April, Enza has been taken over by corporate investor Guinness Peat Group.

Enza has the rights to commercialise apples such as Pacific Rose which arose from the programme, but has cut its own research spending. A joint venture set up between Enza and HortResearch to manage research and development, the Eden Centre for Innovation, is no longer trading.

Enza said in 2000 that it regarded Eden as critical for the development of novel products and solutions to grow the industry. At the same time, Lay-Yee said a continuous stream of high-quality new products was essential for industry success.

Yesterday, Lay-Yee told the Business Herald "that [Eden] never actually took place. The company's just been parked at the moment."

AIGN spokesman John Morton said if negotiations with HortResearch were successful, the three organisations could form a commercial committee to decide how varieties would be marketed and promoted. A lot of work had gone into the discussions but it was too early to predict an outcome.

Morton is manager of the New Zealand Fruit Tree Company, one of eight global AIGN members.

The members of the Fruit Tree Company - an import and distribution company - are Hawkes Bay, Patullo's and Peakview nurseries in the Hawkes Bay, Ashburton-based Allenton Nurseries and Nelson's Lambourne Marketing.

They comprise around 40 per cent of the nursery industry, though Peakview no longer trades in fruit trees but specialises in root stock. Hawkes Bay Nursery is also known as R.G.A. Nursery.

The Fruit Tree Company had been a member of the 20-year-old AIGN for five years, Morton said.

The local nurseries' research and development had been confined to field trials and assessments for importing companies such as Enza Tree, formerly the Fruit Industry Plant Improvement Agency.

AIGN was influential in the international marketing of the Pink Lady apple and its global network was its key advantage, Morton said.